Retail sales rose 0.6 percent in August as pace of recovery slows

Retail sales rose 0.6 percent in August as pace of recovery slows
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U.S. retail sales rose just 0.6 percent in August, according to seasonally adjusted figures released Wednesday by the Census Bureau, slowing for the third consecutive month.

American retailers and food service establishments brought in a seasonally adjusted $537 billion in sales in August, according to the Census Bureau’s advance estimate, just roughly $3 billion more than in July. 

August’s 0.6 percent rise in retail and restaurant sales comes after gains of 0.9 percent in July, 8.6 percent in June and 18.3 percent in May, marking a notable slowdown in the pace of the coronavirus economic recovery.

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Retail sales dropped in February and plummeted through March and April as the emergence of the coronavirus pandemic forced thousands of businesses to close or limit operations. 

The record-breaking surge in unemployment that followed and the daunting economic future ahead forced millions of Americans to pull back their spending, sapping a crucial source of growth from the economy.

Retail sales bounced back sharply following declines of 8.2 percent in March and 14.7 percent in April as businesses began to reopen in May. But the resurgence of the pandemic has slowed the pace of job gains and consumer spending increases while driving permanent layoffs and business bankruptcies higher.

"It must be noted that overall retail sales in August were nonetheless 2.6% higher than they were at the same time last year, making retail consumption one of the fastest-recovering areas of the US economy. But without a doubt, the momentum of this recovery has stalled, and we believe the US economy has several hard months ahead," wrote Cailin Birch, global economist at The Economist Intelligence Unit, in a Wednesday analysis.

There is broad agreement among Democrats and Republicans that another stimulus bill is necessary to reignite the pace of the recovery and protect millions of Americans from deeper suffering. Even so, both parties are deeply divided about the scale and scope of another package and have cast doubt on the likelihood of a deal before the November election.

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"We could put a bill on the floor, but we want to put a bill on the floor that will become law," Speaker Nancy PelosiNancy PelosiPelosi: Trump hurrying to fill SCOTUS seat so he can repeal ObamaCare House lawmakers reach deal to avert shutdown Centrist Democrats 'strongly considering' discharge petition on GOP PPP bill MORE (D-Calif.) said in a Wednesday appearance on MSNBC's "Morning Joe" program.

Democrats have proposed a roughly $2 trillion package that includes direct payments to U.S. households, renewing enhanced unemployment benefits, rental and mortgage aid, and funding for state and local governments.

Republicans, however, have voiced opposition to a bill costing more than $1 trillion as the party faces internal divides over how much attention should be paid to the rising national debt.

President TrumpDonald John TrumpOmar fires back at Trump over rally remarks: 'This is my country' Pelosi: Trump hurrying to fill SCOTUS seat so he can repeal ObamaCare Trump mocks Biden appearance, mask use ahead of first debate MORE appeared to endorse a larger bill in a Wednesday tweet bashing Democrats for being opposed to direct stimulus payments despite the Democratic-controlled House overwhelmingly supporting such measures.

“Democrats are 'heartless'. They don’t want to give STIMULUS PAYMENTS to people who desperately need the money, and whose fault it was NOT that the plague came in from China. Go for the much higher numbers, Republicans, it all comes back to the USA anyway (one way or another!),” Trump tweeted.